Question

The value of a machine, V, at the end of years is given by V = C(1 - 1)', where is the original cost and is the rate of depreciation. Find the value of a machine atthe end of 4 years if the original cost was $2387 and r = 0.18. Round to two decimal places.Answer

Answer 1

Given,

`V=C(1-r)^t`

t = 4 years

C = $2387

r =0.18

Steps,

#1. Replace,

`V=2387(1-0.18)^4`

#2. Substract 1-0.18

`V=2387\cdot \:0.82^4`

#3. 0.82^4=0.45212176, then

`V=2387\cdot\:0.45212176`

#4. Multiply

`V=1079.21464...`

#5. Round to two decimal places

`V=1079.21`

Answer: 1079.21